At least 198 Palestinians have died and 1,610 wounded in Gaza as Israel retaliated against Hamas's assault on Israel.

Israel has conducted a number of airstrikes in Gaza and clashed with gunmen at the border fence around Gaza.

The Magen David Adom emergency medical service said in a statement that at least 40 people died while fighting Palestinian militants in Israel.

It said that MDA teams treated hundreds of casualties and pronounced 40 dead, while the Israeli health ministry confirmed that at least 779 people were injured.

As Hamas announced the beginning of a new operation, Palestinian militants in the Gaza Strip sent fighters across the border and fired thousands of rockets into southern Israel.

Israeli forces put the country on war alert and began attacking targets in Gaza. In a serious escalation, salvos of rockets fired from Gaza set off constant air raid sirens as far north as Jerusalem.

As a result of ordering an extensive mobilization of the army reserves, Prime Minister Benjamin Netanyahu declared "we are at war" and vowed severe retaliation. "The enemy will pay an unprecedented price" for the surprise attack, he warned.

A video released by Hamas, which controls the Gaza Strip, showed its fighters capturing three men dressed in civilian clothes and describing them as "enemy soldiers."

The Ezzedine al-Qassam Brigades, the armed wing of Hamas, announced that they would end all the crimes committed by the occupation (Israel).

Over 5,000 rockets were fired in the first 20 minutes of Operation Al-Aqsa Flood."

In several locations near the Strip, Israel's army said its forces were fighting Palestinian militants. The operation was dubbed "Swords of Iron".